BPO sector back on expansion mode; office space takeup rising

After a hiatus partly triggered by political jitters last year, the Philippine business process outsourcing (BPO) industry is back in a big way, with the knowledge process outsourcing (KPO) subset becoming more significant as more workers upskill or reskill beyond the usual call center operations.

Property consulting firm Colliers Philippines reported on Thursday that based on first quarter Metro Manila office space takeup—a good indicator of appetite for expan- sion—KPOs accounted for 28 percent of total volume in the first quarter, up from only 16 percent throughout last year.

Some of the major KPOs that closed property deals during the first quarter are Amazon, Google, Accenture and ING, Colliers reported.

Regular voice-based BPOs, on the other hand, also increased their share to 18 percent in the first quarter from only 9 percent for the whole of 2017.

Net takeup of office space amounted to 390,000 square meters in the first quarter. Combining the space taken up by regular BPOs and KPOs, their cumulative share of 46 percent in the first quarter is bigger than the 23-percent share of online gaming firms, which last year made up for the slack in BPOs with a hefty share of 40 percent.

Dinbo Macaranas, senior research manager, said the increasing importance of KPOs was aligned with the BPO industry’s moves toward upskilling or reskilling.

KPO is a subset of BPO that involves outsourcing of core functions requiring specialized skills and knowledge, such as animation, design, research and development, digital marketing, and legal services.